What Happened
SAP has released its Value of AI Report 2026, conducted by Oxford Economics across more than 2,600 business leaders in 13 countries. The Australian findings show a country moving quickly on AI deployment but struggling to build the governance structures needed to support that pace.
AI now supports 29 per cent of tasks in the average Australian business, up from 25 per cent a year earlier. Business leaders expect that figure to reach 48 per cent within two years. Spending is rising in step: organisations expect to invest an average of approximately AU$35.5 million on AI this year, up from AU$27.5 million last year, with a further 44 per cent increase anticipated over the next two years. That figure still trails the global average of AU$40.4 million by around AU$5 million.
Returns are growing too. Australian companies expect ROI of 19 per cent this year, up from 15 per cent last year, and project that figure will reach 37 per cent within two years. Both numbers remain below the global average.
The governance picture is more concerning. Only 22 per cent of Australian organisations report being mostly or fully ready in AI governance, well behind the global average of 33 per cent. Some 42 per cent of respondents indicated they are deploying AI agents faster than they can standardise and govern them.
Why It Matters
The gap between deployment speed and governance readiness carries real risk. When organisations roll out AI tools without clear frameworks for oversight, accountability, or safe use, employees are left to make judgment calls without adequate guidance. The report's findings suggest that is already happening at scale.
"Lack of understanding risks driving decisions by fear rather than evidence, and so closing the governance gap must start with closing the trust gap," one finding from the report noted.
The report also pointed to workforce readiness as a pressure point: "These findings point to an urgent need for role-specific training, stronger safe-use guidance and change management that brings employees along as AI becomes embedded in daily work."
Australia's regulatory environment adds weight to these concerns. The Office of the Australian Information Commissioner and the ACCC have both flagged AI-related data handling and consumer protection as active areas of scrutiny. Organisations that build governance frameworks now are better placed to meet obligations as formal rules take shape.
Key Details
The report described Australia's position plainly: "Think of this as Australia's AI school report: improving, but still not working to its potential."
On the investment opportunity, the report stated: "With an estimated AU$150 billion of AI-related infrastructure investment promised over the next several years, Australia has a once-in-a-generation opportunity to turn AI confidence into national competitive advantage. But infrastructure alone won't get us there."
The report was direct about what needs to follow: "Organisations need to strengthen their data foundations, governance frameworks and leadership structures. Otherwise, we risk building the rails for an AI economy without being ready to run on them."
On the value question, the report noted: "The returns are starting to come but not fast enough, and not for everyone," and added: "AI value compounds over time. The organisations that act now, focus on the right end-to-end processes and get their data in order will look back in two years and be glad they did. The ones that wait will be asking why the gap got so hard to close."
The report also addressed the relationship between governance and innovation directly: "Artificial intelligence is only valuable if people know when to trust it, and when to question it. Good governance shouldn't be viewed as slowing innovation. It's what allows organisations, employees and the broader community to adopt AI with confidence."
Background and Context
The SAP Value of AI Report 2026 is the latest in a series tracking enterprise AI adoption globally. The Oxford Economics methodology covers more than 2,600 business leaders across 13 countries, giving the Australian data a meaningful comparative baseline.
Australia has seen a surge in AI-related announcements and investment commitments over the past 18 months, spanning cloud infrastructure, government digital initiatives, and enterprise software. The report's findings suggest the private sector is moving faster on deployment than on the internal structures needed to manage what they are deploying.
What Comes Next
The report's authors called for organisations to treat governance investment as a prerequisite for sustainable AI returns, not a constraint on them. With AI task support expected to nearly double to 48 per cent of work within two years, the window for building those foundations is narrowing.
For Australian businesses, the practical priorities the report identified are consistent: cleaner data foundations, clearer leadership accountability for AI decisions, and training programmes that give employees the context to use AI tools responsibly.